I haven't been active on here, my goals diverted from the minimalism path, but not the FIRE part. So now I'm back to ask if my current plan would work for FIRE, leaving aside the minimalism part.
About myself: Fed employee, plan to work until I hit FIRE on my terms, won't be for another decade. Would have small deferred pension say $10,000/year, no clue what my high three would be so using current salary, but the amount is beside the point outside of having a small pension at 60.
I'm planning to do a roth TSP because from what I have read, between RMD, social security and pension; the roth route seems to be better? I realize that pension and social security would be lower due to shorter working career but if they total around $20,000/year, it already puts me into the next tax bracket so I wouldnt have the option of the 0% tax strategy that seems to be favored on FIRE blogs.
I know I could delay social security to 70, but hopefully I would have $1 million between taxable/tsp by then or my entire FIRE plan is out the window so lets say I have that much at 60 with it being evenly split between taxable/tsp. So between 60 to 70, I would have to drain $500,000 as much as I can to avoid RMD and social security at 70 but still have a pension income. How can someone do this without a large tax hit?
If I FIRE at 50 to give myself an additional decade to drain TSP, I would still have to do it at 4% swr rate and to keep taxes low, I still couldn't do a large conversion ladder each year, meaning I might have to work a few months a year to make up difference (may not have enough at 50 for a full FIRE)
So my current plan is to do a roth TSP and if I FIRE at 50, I can pull out $18,000/year from the roth TSP without any ladder since it would be considered contributions from the past years of working. This made sense in my mind because if the TSP at 4% was $18,000 anyways, I would rather take it tax free instead of a conversion ladder from traditional tap for the same $18,000 and pay taxes on it. this lets me use the other half in taxable account for long term capital gains.
Sorry for a long winded question, is there a better way to get $40,000/year as a single person at a lower tax bracket? A lot of the FIRE bloggers writing about minimizing taxes are based off deductions for a couple. If $18,000 of it were tax free from roth tsp, that would be my nonexistent "spouse's" portion, if I later marry, I will have even more play room. None of the FIRE articles I found take into account a pension, small as it might be, but it would still put me into the next tax bracket.
PS: I know roth tsp has RMD at 70 as well, but it would be tax free so I am not too concerned about it for tax planning, at least it would be less than a straight traditional tsp.
PPS: Assume I can't fire earlier than 50, what would be the best way to get my $40,000 if my egg was split evenly between tsp/taxable while avoiding a large tax penalty when social security/pension/rmd hits.
edit: I just realized I didn't post this in the tax subsection, can someone please move this if it is better there?